After three years of false starts and Euro 240BN in loan pledges, European and IMF officials announced their latest effort this week, hailing it as,” a milestone in fighting the debt crisis,” an echo of the past two loan packages description. To increase their chances of success this time around they have cut the rate charged on bale-out funds and suspended interest payments for a decade. Furthermore, they have given Greece another 15 years to pay back certain loans and engineered a Greek bond buyback, at 35 cents on the Euro, assuming that creditors accept this, which has to be completed before the IMF chip in their part of the Euro 34.4BN loan instalment to be paid in December. Finally, the ECB will pay its profits from its Greek bond holdings into the rescue program, from where national governments will allocate their share of the profits to Greece’s bailout account, thereby circumventing the rules that bar the politically autonomous central bank from directly lending to the state.

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